The Legal Services Board (LSB) has commenced a probe into the Solicitors Regulation Authority (SRA) regarding its independence from the Law Society.
The SRA has independence in terms of its governance, but is currently structurally linked to the Law Society through shared resources such as finance and HR systems. Around 30% of a solicitor’s annual practising fee goes to the Law Society, with the rest going towards the SRA.
In a public letter addressed to the Law Society’s interim chief executive, Paul Tennant, the LSB announced its intention to ‘commence a formal investigation into the internal governance arrangements between the Law Society and the SRA.’
The letter also states that the aim of the probe is to determine whether the Law Society and the SRA comply with Part 4 of the Schedule to LSB’s Internal Governance Rules 2009, which require that internal governance arrangements must not impair the independence and effectiveness of regulatory functions.
In December 2016 a Competition Markets Authority report into legal services said: ‘Given the serious concerns being raised with us about the current arrangements, we believe that there is a strong rationale to assess the degree to which frontline regulators can operate free from the influence of representative bodies.’
An SRA spokesperson commented: ‘We welcome the LSB’s decision to undertake a formal investigation into the governance arrangements between the Law Society and the SRA. We are continuing to work closely with the LSB and the Law Society, and look forward to the outcome of the investigation.’
Law Society president Robert Bourns added: ‘We support the LSB’s role of ensuring the system as a whole is working for clients, the wider public and the profession.
‘The Law Society does not fetter the Solicitors Regulation Authority’s regulatory activities and responds to consultations as any other stakeholder. On a day to day basis the two organisations maintain good working relations and share support services such as finance and HR systems.
‘We will work closely and collaboratively with the LSB on their review.’
In June 2016, swiftly after the Brexit vote, the Law Society argued to MPs that plans to give regulators full structural independence should be shelved.